Southeast Asia holds high potential for halal and it goes beyond food to other products, such as garments, cosmetics and medicines, and services including tourism, hotels and hospitals. The potential is rising in line with the increasing affluence of Muslim consumers worldwide and the desire of businesses to have their products certified by various Muslim organizations.
With Muslims accounting for 240 million of the 600 million people in Southeast Asia, the region has extensively developed halal food production with progress seen in halal certification. Two Muslim majority countries-Malaysia and Indonesia -are among the world’s top 10 halal exporters, thanks to their international reputation, concerted efforts by government and strong local supply chains.
Thailand, where Muslims make up only about 6 percent of the population, is already one of the world’s top exporters of food products and is looking to apply its expertise to halal products to tap into the higher purchasing power of Muslim populations worldwide.
Globally, there are about 1.7 billion Muslims and the number is expected to reach 2.8 billion or one-quarter of the global total by 2050. The global halal market is currently valued at $2.3 trillion covering both food and nonfood sectors, and is expected to be worth $6.4 trillion in 2018.
Under its five-year plan that will start next year, Thailand aims to become one of the world’s top five halal exporters by 2020, a jump from 13th place at present. A total budget of 8 billion baht will be devoted to improving manufacturing capability, speeding up certification, research and development and enhancing international marketing. It is a joint effort by the Industry, Foreign Affairs, Commerce, Agriculture, Tourism and Sports ministries.
The country has already appointed a national halal committee and the five-year plan was endorsed early in June. It outlines strategies for targeted industries that include food and beverages, textiles and garments, cosmetics, medicine and herbs, restaurants, tourism, hospitals and spas, Industry Minister Atchaka Sibunruang said.
In 2013 Thailand exported $5.1 billion worth of halal products to the Organization of Islamic Cooperation, just 3 percent of the $164-billion total to the group of 57 countries. Globally, Malaysia and Indonesia were ranked ninth and 10th, respectively, in terms of halal exports.
This year, Thailand projects its halal food exports will increase by 5 percent to $6.1 billion, Atchaka said.
According to Datamonitor, the halal food trade is poised to reach $10 trillion, or one-fifth of the global food-market total, by 2030. Halal food imports to the Gulf Cooperation Council are forecast to reach $53.1 billion by 2020, according to the Economist Intelligence Unit.
Malaysia saw its halal exports rising to 37.7 billion ringgit ($10.17 billion) last year, with food and beverages accounting for about 40 percent of sales. The Malaysian government has also taken steps to support halal service providers, including Islamic finance and halal logistics and transport, and they have become a major part of the Malaysian halal industry.
Datuk Seri Jamil Bidin, CEO of Halal Industry Development Corp. said recently that the halal industry was forecast to contribute 5.8 percent of Malaysia’s gross domestic product by 2020 from less than 2 percent at present.
Atchaka, however, noted that challenges remain for Thailand to expand its presence in the global halal business, because it is a niche market related to the religious and cultural beliefs of consumers.
Thailand’s weak points at the moment are in manufacturing processes and development of services.
We have to expand our exports by 10 percent a year to be among the top five halal exporters, she said. We will continue to develop five provinces in the far South as the key halal production base, raw material source, and product development and distribution. A total of 3,600 Thai companies now hold halal certification, altogether covering 120,000 product items.
According to the Department of International Trade Promotion (DITP) at the Commerce Ministry, the major export markets for halal products from Thailand include Dubai, which is positioned as the gateway to Muslim countries, Indonesia, where nearly 90 percent of the population are Muslim, and some parts of China and the United States where a number of Muslims live.
At present, several of the world’s leading exporters of halal products are non-Muslim nations with Brazil ranked first. Others include the US, Australia and France.
Chantira Jimreivat Vivatrat, the DITP deputy director general, said it had been making efforts to promote halal exports for more than a decade.
This is a market with high purchasing power, she said. Indonesia, in particular, is a high-potential market for Thai exports because Muslims living there account for 12 percent of the Muslim population in the world.
The Indonesian and Malaysian Muslim middle classes have been growing, giving rise to new modes of consumption and lifestyle changes.
Asia Pacific is home to about 1 billion Muslims. Australia, together with Brazil and New Zealand have long profited from the halal product trade in the region. More than 80 percent of Australia’s cattle exports go to the region, mostly to Indonesia.
Visit Limlurcha, vice-president of the Food Processing Industry Club at the Federation of Thai Industries, said that certifying halal products was time-consuming at present, taking about one year on average. But if Thai products are certified in Dubai in the United Arab Emirates (UAE), it could pave the way for their entry into other Gulf States.
Halal products from Thailand are led by chicken and shrimp, vegetables, canned and dried fruits and some ready-to-eat foods.
Tapping tourism demand
Another promising area for Thailand is halal tourism, which is geared toward Muslim families who abide by the rules of Islam. Hotels in such destinations do not serve alcohol and have separate facilities such as swimming pools and spas for men and women. Halal tourism also offers flights on which no alcohol or pork products are served, prayer times are announced and religious programs are broadcast onboard.
Countries in Asean are trying to attract more Muslim tourists from all over the world by providing more facilities in accordance with religious beliefs. Malaysia is working on a program for hotels and resorts to have halal-certified kitchens. Singapore has released a special guide for Muslim travelers to accommodate their need for halal products and services.
In Thailand, Phuket is offering halal-labeled Andaman tours. Japan is also wooing Southeast Asian Muslims by increasing the number of restaurants serving halal certified food and providing space for prayers.
Puwarest Ahmadthirakul, managing director of Royal Thai Travel and Trading Co Ltd, said Muslim travelers were attracted by Thai hospitality, lifestyles and facilities available even though the country is not a Muslim nation like Malaysia and Indonesia.
About 90 percent of his company’s clients are Muslims coming to Thailand mainly for leisure and medical checks. The high season for Muslim tourism in Thailand is June and July when the weather is hottest in the Middle East.
The main challenge for halal tourism in Thailand is limited availability of halal food, causing tourists to waste time traveling from one place to another to find meals they can eat, noted Puwarest.
According to Crescent Rating Agency, the halal hotel market is worth $140 billion at present with a projection to rise to $192 billion by 2020. The segment is relatively untapped with Turkey, Malaysia, Indonesia and Morocco among the biggest players.
Statistics show that halal tourists typically travel with more family members, stay for longer periods and ultimately spend more money than any other niche, it added. Nithiwat Gijsriurai, deputy hospital director at Bangkok Hospital, said that Arab countries, whose governments provide full healthcare coverage to their nationals, faced a serious shortage of healthcare personnel including doctors, nurses and other clinical personnel.
If patients from these countries go abroad for medical treatment, the governments subsidize half of the cost, he said.
Bangkok Dusit Medical Services, the largest private hospital operator in Thailand, operates 43 hospitals in Thailand and two in Cambodia. It aims to have 50 hospitals by 2016. About 60 percent of the group’s total 200,000 foreign patients a year are Muslims.
What Arabic patients are looking for in addition to halal food and prayer rooms are a high standard of medical care, Thai hospitality services, easy access, cultural understanding, and Arabic-speaking medical teams, said Nithiwat. I would also recommend that Thai hospital operators provide them with value-for-money services and accountability.